Norfolk Southern Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Norfolk Southern (NYSE:NSC) will unveil its latest earnings tomorrow, Tuesday, January 22, 2013. Norfolk Southern is engaged in rail transportation of raw materials, intermediate products, and finished goods.

Norfolk Southern Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $1.19 per share, a decline of 14.4% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $1.34. Between one and three months ago, the average estimate moved down. It also has dropped from $1.20 during the last month. For the year, analysts are projecting profit of $5.27 per share, a rise of 0.6% from last year.

Past Earnings Performance: Last quarter, the company reported net income of $1.24 per share versus a mean estimate of profit of. The company has beaten estimates for the past three quarters.

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A Look Back: In the third quarter, profit fell 27.4% to $402 million ($1.24 a share) from $554 million ($1.59 a share) the year earlier, but exceeded analyst expectations. Revenue fell 6.8% to $2.69 billion from $2.89 billion.

Here’s how Norfolk Southern traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

NSC

Stock Price Performance: Between November 15, 2012 and January 15, 2013, the stock price had risen $8.44 (14.8%), from $57.02 to $65.46. The stock price saw one of its best stretches over the last year between November 20, 2012 and November 29, 2012, when shares rose for seven straight days, increasing 6.3% (+$3.57) over that span. It saw one of its worst periods between January 19, 2012 and January 31, 2012 when shares fell for nine straight days, dropping 7.4% (-$5.74) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 4.6% in revenue from the year-earlier quarter to $2.67 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 16.9% in the fourth quarter of the last fiscal year, 6.5% in the first quarter and 0.3%in the second quarter before dropping in the third quarter.

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 5.9% in the second quarter and then again in the third quarter.

Analyst Ratings: There are mostly holds on the stock with 15 of 24 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.21 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.06 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 16.7% to $2.2 billion while liabilities rose by 2.8% to $1.82 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)